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Quiz downgrades sales, earnings guidance after testing Christmas

StockMarketWire.com

Online fashion retailer Quiz downgraded its earnings and revenue guidance in the wake of a tough Christmas trading period and higher spending on staff and marketing.

Ebitda for the year through March was expected in the region of £8.2m, on revenue of around £133.0m.

The revenue guidance would still mark an increase from £116.4m on-year but undershot current market expectations, the company said

Sales for the six-week period from 25 November to 5 January rose 8.4%.

The company, however, also engaged in deeper-than-expected discounting to clear inventory.

The price cutting was expected to reduce gross margins in the six months through March to 60.5%, down from 62.0% for the six months through September.

Quiz acknowledged that it had made significant investments in employee, marketing and depreciation costs in the past year.

'Whilst it is disappointing that the growth in revenues has been insufficient to support these additional costs in the current financial year, we are confident that this investment will support the long-term growth of the business,' the company added.

Chief executive Tarak Ramzan said the company remained confident in its long-term potential as an omni-channel fashion brand with a clear customer focus.

'Management's utmost priority remains achieving further growth for the business and improving profitability in the future,' Ramzan said.